A Kyocera Group Company

A Strategy in Touch With Tomorrow

Business Overview

� AVX is a leading worldwide manufacturer and

supplier of a broad line of passive electronic

components. We have manufacturing, sales and

distribution facilities located throughout the world.

AVX is organized into three main segments: Passive

components, KED Resale and Connectors.

� The Passive Components segment consists

primarily of surface mount and leaded ceramic

capacitors, RF thick film and thin film components,

tantalum capacitors, film capacitors, ceramic and

film power capacitors, super capacitors, EMI filters,

thick and thin film packages, varistors, thermistors,

inductors and resistive products.

� The KED Resale segment consists primarily of

ceramic capacitors, frequency control devices,

SAW devices, resistive products, RF modules,

actuators, acoustic devices and connector products

produced by Kyocera Electronics Corporation.

� The Connectors segment consists primarily of

Elco automotive, telecom and memory connectors

manufactured by AVX.

Table of Contents

A Letter from the President . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 02

A Strategy on-Track for Long-Term Success . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 04

Strategy at Home and Beyond . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 06

Long-Term Customer Relationships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 08

Mission Critical Reliability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 11

AVX Worldwide Manufacturing Locations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 12

Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 12

� Invested in the ATC acquisition to broaden AVX product offerings in more

sophisticated advanced products.

� Increased sales and maintained profitability in a challenging market place.

� Continued winning the respect of customers, reflected in numerous honors,

including Frost & Sullivan’s 2008 Global Capacitor Company of the Year award.

� Developed new products with additional added value to meet the need of our

customers for more complex solutions.

� Further increased the dividend to share our progress with our shareholders.

� Maintained a considerable balance sheet with $815.3 million in cash and

investments and no bank debt at the end of the year.

Fiscal-Year Highlights

A Kyocera Group Company

A Letter From the President

In this fiscal year, AVX’s actions and results demonstrate that our strategy is on track.

AMERICAN TECHNICAL CERAMICS ACQUISITIONLast year, AVX acquired the American Technical Ceramics Corporation – a successful, strong technology

company for nearly 40 years. ATC is a leading manufacturer of high performance electrical components,including capacitors and thin film circuits for a broad range of complex applications.

This was a sound investment for a number of reasons. ATC has a history of solid sales growth. Itsproducts have strong market credibility due to their much-desired high-reliability, high-frequency uses inaerospace and similar markets with mission-critical needs.

AVX will continue to use the ATC brand in the field, while enhancing its technology with capital strengthand incorporating our global sales organization to give ATC a broader reach worldwide.

SEGMENTSOverall, sales increased $120.8 million, or 8.1% in the year just ended, compared to a year earlier, due

to the continuing strength across our three segments:� Passive components sales increased $66.7 million, or 7.5% over the prior year. Advanced Products with

their more sophisticated technology and added value comprise an increasingly larger share of thepassive segment’s sales.

� Kyocera Resale sales increased to $468.2 million, up 7.7% over the prior year.� AVX and KEC Resale Connectors sales increased $20.7 million, a 12.0% increase over a year earlier.

PAST CHALLENGESThe last year was not without its challenges as macroeconomic issues dominated the year. Some of

the issues affected the broad business climate, while others touched our business sector. The medical device market, which had experienced fast growth in recent years, slowed. Yet, we are

seeing renewed strength in early calendar year 2008 as the continuing drive by device makers to reduce thesize of their products is resulting in a new series of offerings and increased functionality.

The US Dollar had both positive and negative effects as the year progressed. Weakness in the USDollar increased the operating costs of our manufacturing sites in Europe, while making exports from theUS more competitive across the world.

The energy and metal costs – particularly copper, silver, gold and platinum – were negatives that, todate, have not settled down. Some of this is a result of the weakness of the dollar, but other increases aredue to demand and speculation. We will continue balancing our product offerings and rationalizing ourmanufacturing structures to offset some of these pressures.

Our continued focus on 1) increasing production efficiency while 2) controlling operating costs and 3) expanding capacity for value-added products will partially neutralize the effects of the US Dollar andincreased materials costs going forward.

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FUTURE CHALLENGES/OPPORTUNITIES The coming year has its challenges. The macroeconomic climate remains unclear for the near-term.Several factors may work to minimize the potential negative impact. Our customers have leaner

inventories than in the past. Industry capacity has been slow in coming during the current cycle. Whilethere may be inventory adjustments, we expect them to be less severe than in the past.

This market has opportunities with the potential for further growth in the upcoming year. For instance,utilization of our more complex products continues to increase. In some cases, demand outstrips supply.The rapidity of technology change by our customers and the insatiable demand for smaller, better andfaster devices from consumers continues to present growth opportunities for the supplier with thetechnology base to meet those demands.

MASAHIRO UMEMURAIt is with profound sadness that we report the passing on December 25, 2007, of Masahiro Umemura,

who had served as a director of the Company since 1990. Mr. Umemura was Vice Chairman of the Board andRepresentative Director of Kyocera Corporation. “Mark,” as he was known to all those who worked with himover the years, was very active with AVX and was a friend to the corporation. He will be greatly missed.

NEW DIRECTORSI would also like to welcome Kensuke Itoh, Past Chairman of Kyocera Corporation and currently

Advisor and Director of Kyocera Corporation, who rejoined our Board after a brief hiatus, and DavidDeCenzo, President of Coastal Carolina University, who joined the Board in July 2007. We are pleased tohave their insight and expertise available to us.

I would also like to thank the entire Board of Directors, along with our employees, management team,customers and shareholders for their vital contributions to keeping our strategy on track this year.

Our shareholder meeting this year will be held on July 23, 2008, in Myrtle Beach, South Carolina.

John S. GilbertsonChief Executive Officer and PresidentAVX Corporation

A Strategy on-Track for Long-Term Success

Look around you. Right now, as you read this report, survey your surroundings. What do you see? You seeAVX’s strategy at work. In that phone, that computer, that flat screen television. Look out the window. You’ll seeAVX at work in those automobiles, those multi-function cell phones, cell towers, and airplanes. Some of thepeople you spot will be wearing medical devices for the heart, hearing or diabetes. If you could look beyond –further than the eye can glimpse – you would see AVX’s strategy at work in satellites and space stations.

AVX passive products, multi-function advanced components and connectors are woven throughout ourcustomers’ products for solid business reasons. Our products are the result of a business strategy that valuesfirst-to-market innovation, long-term customer relationships, and mission-critical reliability.

First-to-Market Innovation

AVX’s market-leading research and development produces numerous breakthroughproducts that lead the way for the industry.

In the next few years, cell phones will become as powerful as today’s desktop computer– accessing the Internet, movies and other services. These higher data transfer rates requiremore energy. To answer this customer need, AVX PulseCaps™ create pulses of power whenneeded, preserve energy and prolong the product’s life and usefulness. The demand for PulseCapacitors is expected to grow as battery-powered devices with high functionality proliferate.

Automatic light dimmers sense oncoming cars and lower the car’s headlights. AVXfilters separate light signals coming in, enabling the computer to determine if the lightis from an oncoming car, the full moon or reflected light from a nearby building.

To improve the reliability of any electronic system in transient voltage environments– such as today’s automobiles, where a variety of electronic signals abound – AVXpioneered TransGuard® Multilayer Varistors. Today, TransGuard® is used in consumer,medical, aerospace and transportation market sectors.

AVX further optimized the TransGuard® product line by integrating a filtercapacitor, adding protection against voltage spikes and radio frequency interference fromother circuits. In a further refinement of the TransFeed series, AVX created a FeedThru FilterTransGuard® model, offering maximum filtering. Using one TransFeed component eliminatesthe need for up to 5 other components – reducing required space and assembly time.

Working to reduce the space on a power supply board, AVX responded to this customerby creating a two-part tantalum stack. The customer was so pleased it expanded the AVXsolution to become the common platform for all their government-related power supplies.

AVX set an industry standard when it worked with one avionics customer to createhigh reliability, very low ESR tantalum capacitors. The product was so successful it wasadopted industry-wide by other avionics manufacturers.

Last year, we added a new radial leaded ceramic capacitor to our SkyCap® series. It allowshigh capacitance with a package volume about half the size of previously available products.AVX is the first company to offer a radial leaded MLC capacitor with a 100V rating in such asmall physical size.

Also first to market is a new entry in the SpinGuard® series of axial leaded capacitors.

The capacitor is compliant with the new international environmental standards (RoHS) and

is an ideal replacement for tantalum axial leaded devices.

AVX is the first in the industry to expand its portfolio of thru-hole advanced passive

capacitors with several hundred new offerings in its MIL-PRF-123 product series for

defense and aerospace markets. These parts represent improved capacitance values,

higher voltages and new tolerances.

The new SpinGuard®

utilizes the X5R dielectricoffering a capacitance of3.3μF at 10V.

TECH SPEC 1

Products are available inmolded radial, moldedaxial, and two-pin DIPleaded configurations. Capacitance values rangefrom 1pF in axial leads andup to 4.7μF in radial leads.Voltages range from 50V to200V in radial and axiallead configurations.

TECH SPEC 2

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HOME THEATRE SYSTEMSThe newest “thin-screen” televisions unveiled this year are only 1.5 inches thick. To achieve this

miniaturization, the manufacturer says that it completely redesigned the television’s integrated components.The power supply is one-third the thickness of current models, with a cooling system that is now fanless.

When customers require smaller spaces with greater reliability, AVX can help. For greater reliability in high-costPlasma and LCD TVs, AVX is replacing traditional aluminum electrolytic capacitors with the new OxiCap® devices.

TRANSPORTATIONAutomobiles are increasingly becoming computers on wheels. Automakers are quickly replacing

traditional wire harnesses with computer communication busses, as they shift from electromechanical tofully electronic functions. This change reduces weight, saves on expensive copper, improves mileage,

and creates better reliability.As the car becomes increasingly computerized, AVX parts – especially filters – will

be needed to isolate the various electronic signals. They prevent the airbag from deployingwhen a driver turns on the windshield wiper or changes a channel on the radio – or –prevent the airbag from sending off a signal that locks up the brakes.

Active cruise control uses a video camera or radar thatcontrols speeds up and down to keep pace with the car in front. AVXparts for proximity detection (backup systems) flow from defenseand aerospace developments.

In Europe and Asia, a resurgence of rail travel is underway.Manufacturers of the newer diesel electric engines need

capacitors and connectors just as the makers of handheld music players. One majordifference is the amount of power these systems must handle, resulting in capacitors thatare nearly 3 feet high and just as wide.

THE SEARCH FOR NEW ENERGY & EFFICIENCYAVX parts are involved in nearly every dimension of the search for

new energy sources, such as windmills that capture energy from thewind use power capacitors, as do solar cells that create electrical powerfrom the sun’s rays.

AVX parts also help make better use of the energy already available.Power control circuits for cell phones help preserve battery life. The circuits,which use parts produced by AVX, sense how close the phone is to atransmission tower or base station. The closer they are to the base station, theless power the phone uses to transmit, thus saving battery power.

Today’s exploration for oil takes drilling out into the ocean, down as faras 60,000 feet and at temperatures up to 300°C. To find the potential pockets ofoil, circuits several feet long must fit into the tight confines of the narrow drillcasing in a very harsh environment. AVX parts are in there, stable and reliable.

AVX is working on a Department of Energy project to help develop hybridautomobile engines. AVX will play a key role in the development of the powercapacitor for the hybrid’s complex, advanced circuits. The task is even morechallenging because it will need to withstand intense engine heat whileoffering a very affordable cost per unit.

MEDICAL DEVICES –Enhancing the Quality of LifeWith smaller, more advanced parts, such

as those developed by AVX, pacemakermanufacturers can produce one electronic“box” with many pacemakers inside. Justactivate the unit and program it for whichevertherapy is required.

AVX is working with customers that are developing noninvasivedefibrillators. Rather than opening the chest, the unit is inserted through theleg into an artery or vein, much like a cardiac cath or angioplasty. Implantingthe defibrillator then becomes outpatient surgery.

AVX parts play a key role in another breakthrough medical device. Anew version of the cochlear hearing implant is for pediatric patients. As thechild’s hearing improves and their nerves take over, the unit automaticallydecreases the amount of electrical stimulation it requires.

Implantables aren’t just for hearts and hearing anymore. Creativelyengineered neural applications help with epilepsy and Parkinson’s. Yet,even greater potential lies in the control of depression through the ability tostimulate the brain, changing the actual electrochemical balance.

Several device manufacturers are very close to creating an artificialpancreas that monitors the amount of insulin in the body and pumps theappropriate amount of insulin without any external human intervention.

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Scale comparison ofstandard capacitor andunit used on trains.

Strategy at Home and Beyond

Long-Term Customer Relationships

AVX makes it a point to get close to its customers. To better understand their needs. To better anticipate thenext request. To be THEIR solution provider. Customers regularly turn to us with a problem and AVX – withexisting products or by developing a new product – creates a solution for the problem.

Nearly 20 years ago, a major energy exploration company asked that AVX create a capacitor thatcould function in downhole environments where the temperature was 200°C. This ET series of GLASS Capsis still being used.

A major defense contractor wanted to shrink the size of night vision surveillance devices. AVX workedwith mechanical and electrical engineers to create a solution that not only saves space but improves visionquality, while reducing the electronic “noise” emitted by the system.

Another customer called with a one-week deadline to design a new radio for government use. AVXengineers created the special low temp BestCap® that helped the supplier win the contract.

As automobiles “morph” from mechanical devices to computers on wheels, our auto industry partnersregularly work closely with AVX on solutions. For instance, design collaborations with automakers and theirelectronic module manufacturers identified AVX Flexiterm® capacitors’ abilities to reduce or eliminate powerproblems due to connections broken from flexing. The solution increases automakers manufacturing yields whilereducing costly warranty repairs and recalls.

Even in today’s world, where technology and the Internet can connect us instantly,a real person to talk with is important to customers. AVX maintains a global network ofsales people strategically positioned close to our customers – a real person with realanswers when customers need it.

Even when we can’t be there in person, AVX is standing by to help. One example isthe SpiTanII new 1.6 version of the company’s popular computer simulation program fortantalum and OxiCap® niobium oxide capacitor ranges.

Designers can select a desired component by capacitance, rated voltage, case size,series or by specific part number. All basic parameters for the selected part are displayed– frequency characteristics of capacitance, ESR, impedance, DF and ripple current andripple current voltage ratings.

With its Quick Connect Program, AVX aids design engineers by supplying within 48hours samples of more than 200 different connectors. The program includes 10 of the mostpopular AVX FFC connector series.

In most cases, these connectors take considerable time to manufacture. By offering quick off-the-shelfsamples, AVX decreases sample delivery time, speeding design and prototyping time for the customer.

Enabling Technology

We make improvements in products that may not change performance or incorporate additional features,but make it easier for the customers to build their products. Their efficiency increases and manufacturing time

and costs decrease.At one of the many design seminars that AVX holds around the world, a

leading German auto electronics firm discussed their products with our engineers.As a result, AVX was able to streamline the electronics manufacturer’s entiredesign by using Advanced MultiLayer Varistors from AVX as both an EMI filter anda Transient Voltage Suppressor. Additionally, the parts maker decided to use AVXNiobium Oxide capacitors, reducing the circuit size and weight of power supplylines while improving performance and reliability.

TECH SPEC

Version 1.6 of theSpiTanII® softwarecontains 471 new partnumbers.

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Mission Critical Reliability

In many of our customers’ products, reliability is important if not absolutelynecessary. From implantable heart defibrillators to undersea cables that carrythe Internet to many parts of the world. Even the windmills that capture wind

power. Windmills are often placed in the most remote parts of the world,where maintenance is difficult and costly.

AVX is the supplier of first choice for capacitors in satellitedeployment circuit applications. From solar panel deployment and stageseparation to “waking up” space probes after landing on strangeplanets and moons, AVX components are preferred. They exhibit virtuallyno aging over decades of lab testing and demonstrate the best

performance of any capacitor in extreme temperatures and space radiationenvironments. For these same reasons, AVX capacitors are used as a criticallink in the spin stabilization control of satellites.

AVX spacecraft capacitors are so reliable that they are now used asreference capacitors for industrial and lab measurement applications on earth.

The evolution of aircraft from mechanical to electronic creations makesAVX an important element in the reliability of this mode of transportation.

Aircraft use a variety of AVX capacitors in critical systems. AVX EMIfilters help prevent electronic signals from interfering with the growingnumber of an aircraft’s electronic systems. Modified versions of thistechnology are built into automobiles’ fuel efficiency systems, as well ascomputers, cell phones and PDAs to reduce system “noise.” New generationsof medical technology are also benefiting from these filter components.

Aircraft also use AVX transient suppressors in flight display systems andin the emergency deployments systems, such as exit ramps and on-board fireextinguishers. A modified version of this technology helps minimize theelectronic noise from motors and relays. Along with reducing overall electronicsystem noise, this technology helps reduce the weight of vehicles, an important

element in today’s environment of high fuel costs.AVX parts have earned a unique reputation for

reliability. AVX tantalum capacitors have becomethe preferred choice for embedded systemapplications thanks to their stability and reliabilitybased on efficient self-healing systems and highcapacitance values in small dimensions.“Embedded systems” are designed to operatecontinuously for years without failure…and torecover automatically if a failure does occur.Designs of the latest embedded computers in radar,sonar and digital signal processing contain as manyas 70 tantalum capacitors on a single board.

AN HONORED SUPPLIER� AVX was named the 2008Global Capacitor Company of theYear by Growth ConsultingCompany Frost & Sullivan.According to the award, “With aseries of product innovationsaimed to cope with the fallingprices of capacitors, and forusing the high rate of technicalchange to their advantage, AVXtruly deserves the recognition asthe Company of the Year in theCapacitor Market.”

� AVX is honored for best-in-class service and received the(2006) Lear Supplier Hall of FameAward. AVX was chosen fromamong 2,400 Lear suppliersglobally for exceedingexpectations and demonstratingexcellence in quality, delivery,service competitiveness andcustomer satisfaction. Since theaward’s inception in 1998, only 76awards have been presented.

� For consecutive years – 2006 & 2007 – Electronic Productsmagazine honored AVX with theproduct of the year award.

TECH SPEC

Recently released newmirror-design multi-anode tantalumcapacitors in TPM D-case with 2.9mm heightprovide almost identicalESR levels, comparedwith traditional E-casemulti-anode constructionwith the lower profile ofcomponent at moreconvenient price.

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AVX Sales Channels (OEM 50%, Distribution 41%, EMS, 9%)

Customer Segments

� Computers 23%

� Telecom 15%

� Wireless 13%

� Automotive 12%

� Consumer 12%

� Industrial 12%

� Military 6%

� Medical 5%

� Other 2%

Product Categories

� Passive Components 59%

- Advanced Products 27%

- Tantalum 19%

- Ceramics 13%

� Kyocera Resale 29%

� AVX and KEC Resale Connectors 12%

Board of Directors

Benedict P. Rosen2

Chairman of the BoardAVX Corporation

Kazuo Inamori2,4

Chairman Emeritus of the BoardKyocera Corporation

Donald B. Christiansen1,5

Retired

David DeCenzo1,3,5

President, Coastal Carolina University

John S. Gilbertson4

AVX Corporation

Kensuke Itoh4

Kyocera Corporation

Makoto Kawamura2,3,4

Kyocera Corporation

Rodney Lanthorne4

Kyocera Corporation

Noboru Nakamura2,3,4

Kyocera Corporation

Joseph Stach1,2,3,5

Retired

Yuzo YamamuraKyocera Corporation

Corporate Officers

John S. GilbertsonChief Executive Officer and President

C. Marshall JacksonExecutive Vice President of Sales and Marketing

Carl Eggerding Vice President, Chief Technology Officer

Kurt CummingsVice President, Chief Financial Officer,Treasurer and Corporate Secretary

S.M. Chan Vice President of Sales and Marketing–Asia

Keith Thomas Vice President, President of KyoceraElectronic Devices

1Audit Committee2Compensation Committee3Equity Compensation Committee4Executive Committee5Special Advisory Committee

Peter Collis Vice President of Tantalum

Peter Venuto Vice President of North American andEurope Sales

John Sarvis Vice President of Ceramic Products

John Lawing Vice President of Advanced Products

Stock Exchange

AVX’s common stock is traded on the NewYork Stock Exchange (symbol: AVX).

Stock Transfer Agent and Registrar

The American Stock Transfer and TrustCompany 1-800-937-5449 (Shareholders Services)www.amstock.com

Written shareholder correspondence andrequests for transfers should be sent to:

The American Stock Transfer and TrustCompany 59 Maiden Lane, Plaza Level New York, New York 10038

Investor Questions

Investment questions from securityanalysts, portfolio managers andshareholders about AVX, and requests fora copy of AVX’s Annual Report on Form10-K for the fiscal year ended March 31,2008, filed with the Securities andExchange Commission, should be directedto:

Investor Relations

AVX CorporationP.O. Box 867Myrtle Beach, South Carolina 29578Telephone (843) 946-0466FAX (843) 916-7751www.avx.com

Independent Registered PublicAccounting Firm

PricewaterhouseCoopers LLP10 Tenth Street, Suite 1400 Atlanta, Georgia 30309-3851

01 Sun Valley, California02 Colorado Springs, Colorado03 Juarez, Mexico04 San Salvador, El Salvador05 Olean, New York06 Huntington Station, New York07 Biddeford, Maine08 Raleigh, North Carolina09 Conway, South Carolina10 Myrtle Beach, South Carolina11 Jacksonville, Florida12 Manaus, Brazil13 Coleraine, Northern Ireland14 Paignton, England15 Saint Apollinaire, France16 Betzdorf, Germany17 Lanskroun, Czech Republic18 Uherske Hradiste, Czech Republic19 Jerusalem, Israel20 Penang, Malaysia21 Tianjin, China

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AVX Worldwide Manufacturing Locations

A Kyocera Group Company

POST OFF I C E BOX 867 � MYRTLE BEACH , SOUTH CAROL INA 29578 � WWW.AVX .COM